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South Asia: Imported ferrous scrap demand remains sluggish across key markets

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Melting Scrap

BigMint Bureau

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21 Oct 2024, 19:07 IST

South Asia: Imported ferrous scrap demand remains sluggish across key markets

Indian buyers cautious amid bid-offer gap

Pakistan, Bangladesh witness slowdown

The South Asian scrap market navigated a landscape marked by sluggish demand and shifting dynamics among key players, including India, Pakistan, Bangladesh, and Turkiye. In India, buyers displayed limited interest in seaborne scrap due to a bid-offer mismatch and a slowdown in the domestic steel market, compounded by the approach of the Diwali festival.

Meanwhile, Pakistan grappled with weak demand for imported scrap as delayed payments and the affordability of domestic options weighed heavily on market activity. In Bangladesh, buyers remained cautious amid reduced construction activity, further impacting scrap purchases.

Over in Turkiye, the imported scrap market showed signs of stability, albeit amid an uncertain outlook and a lack of fresh deepsea bookings.

Overview

India: Indian buyers displayed limited interest in seaborne scrap due to a bid-offer mismatch and a slowdown in the domestic steel market. Additionally, with Diwali approaching, market activities have decelerated. Indicative offers for shredded scrap from the US and UK/Europe were reported at $395-400/t CFR Nhava Sheva, while HMS (80:20) was assessed at $380-385/t CFR.

In a notable development, around 3-4 bulk scrap cargoes were reportedly booked by East Coast buyers, consisting of mixed scrap from the US, though further details remain undisclosed.

A representative from a trading company commented, "The Indian market is expected to remain soft leading up to Diwali. The overall steel market slowdown, along with import oversupply, is putting pressure on the domestic HRC market. The bulk bookings from East Coast India are a positive sign, but with the potential resurgence of the Turkish market and a possible scarcity in the US market, the outlook remains uncertain."

Another trader noted, "Demand is sluggish, with finished steel slowing down and festivals further impacting activity."

Market participants also highlighted that "After a prolonged lull, there's been a burst of bulk scrap buying in India, although scrap availability from the US export market is tight due to strong demand from domestic mills. These deals were likely possible because Turkish buyers are opting for European scrap at cheaper rates, and Turkish mills currently enjoy a strong $240-245/t spread."

Pakistan: Demand for imported scrap in Pakistan remained weak due to sluggish steel sales, delayed payments, and the greater affordability of domestic scrap compared to imported options. Indicative offers for shredded scrap from the UK/Europe were heard at $400-405/t CFR Qasim.

Bangladesh: Bangladeshi buyers stayed on the sidelines due to a slowdown in the domestic steel market, driven by reduced construction activity and halted ongoing projects. Indicative offers for shredded scrap were assessed at $405-410/t CFR Chattogram, while HMS (80:20) was offered at $390-395/t CFR.

Turkiye: The Turkish imported scrap market saw sideways movement, following earlier declines in the week amid uncertainty. No fresh deepsea bookings were heard. Some market participants speculated that EU material could now be booked at $360/t CFR, though this wasn't confirmed. A European recycler indicated that offers for EU HMS 1/2 (80:20) below $370/mt CFR were acceptable for some suppliers, especially with the favorable Euro-US dollar exchange rate.

Tradable values for US HMS (80:20) were reported at $370-375/t CFR, showing some stability in the market despite the absence of new deepsea deals. While buyers aimed for prices below $370/t CFR, no confirmed trades supported this, and suppliers resisted cutting offers further. Thus, US origin HMS (80:20) was assessed unchanged at $372/t CFR.